When an individual dies, their will must be probated, or approved by a court, before the assets under their will can be distributed. Usually probate is a smooth and easy process, but occasionally there is a dispute regarding the will. This sometimes happens when the testator (the person whose will is being probated) had an estranged child, or a new spouse and children from a prior marriage, or left money to close friends instead of distant relatives.

When someone brings a will contest, challenging the validity of a will, the court has to determine whether the will really reflects the testator’s intent, or whether someone unduly influenced the testator, or the testator lacked capacity, or other cause exists to invalidate the will. The problem is, these questions revolve around the testator’s state of mind, and the testator is no longer around to ask.

Pre-mortem probate allows a testator to submit a will to court for approval before he dies. That way, the judge can ask the testator delicate questions about undue influence and capacity while he’s still alive, instead of relying on extrinsic evidence. The idea is to prevent will contests and ensure that the testator’s wishes are carried out.

This idea has its flaws, but all in all, I’m in favor of it. Occasionally we have clients who are concerned a relative will challenge their will. We’re able to offer our clients some options to head off will contests, but none are as bulletproof as having a court probate the will in advance. Pre-mortem probate would give people a new way to ensure that their wishes are carried out, and have the peace of mind that comes with that certainty.

Five states, including New Hampshire, have passed laws allowing pre-mortem probate. New Jersey may eventually join that list.

For specific advice on wills, probate or estate administration, call or email us.

Under the ABLE program, persons who became disabled before age 26 can open an ABLE account, and become the beneficiary of that account.

The beneficiary and their family or friends can contribute up to the amount of the annual gift tax exclusion to an ABLE account (currently $14,000 per year). The ABLE account holds that money, and is managed and invested by the state. Any growth on the money in the ABLE account is tax-free, provided it is spent on “qualified disability expenses” for the beneficiary. Qualified disability expenses are defined broadly, and include things like education, healthcare and professional services.

An ABLE account can hold up to $100,000 per year without disqualifying the beneficiary from Supplemental Security Income (SSI), and an unlimited amount without disqualifying the beneficiary from Medicaid. When the beneficiary dies, any remainder in the ABLE account has to be used to repay Medicaid for the amount it spent on the beneficiary.

ABLE is a welcome tool for people with disabilities and there families. But an ABLE account is not a replacement for a special needs trust. For large inheritances or lawsuit awards, the $14,000 annual contribution limit and $100,000 total limit would be problematic. Moreover, third-party special needs trusts have no obligation to repay Medicaid, while ABLE accounts do.

There remain a number of open questions on ABLE – how will New Jersey administer accounts, how will the money be invested, how will beneficiaries make withdrawals and how will the state decide whether withdrawals are qualified disability expenses, among other questions. It looks like ABLE won’t take effect until October 2016, so hopefully these questions will be resolved before then.

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